Enforcement of Commercial Contracts in Nigeria- P. D. Pius Esq*

The enforcement of commercial contracts in Nigeria can be a daunting task, especially when dealing with recalcitrant parties. However, Nigerian law provides several avenues for aggrieved parties to seek redress and enforce their rights.

One such avenue is arbitration, a process whereby parties agree to submit their disputes to a neutral third-party for resolution. The Arbitration and Conciliation Act, provides a framework for the conduct of arbitration proceedings in Nigeria and the recognition and enforcement of arbitral awards. A significant advantage of arbitration is that an award can be enforced across borders, making it an attractive option for parties seeking to access assets globally. You need an expert at the time of contract to adequately include a detailed Arbitration Clause to ensure enforcement of the contract where there is default.

Another option for enforcing commercial contracts is through court action, either in Nigeria or in the home country of the contract or contractor. Nigerian courts particularly State High Courts and Federal High Court have jurisdiction to entertain disputes arising from contracts made in Nigeria or with a Nigerian element. The choice of the Court is depending on the subject matter. For instance maritime goes to Federal High. The Nigerian court system is generally adversarial, and parties can expect a thorough examination of their claims and defenses. Where a contract provides for the jurisdiction of a foreign court, Nigerian courts will generally respect the parties’ choice of forum, subject to considerations of public policy and mandatory provisions of Nigerian law. Furthermore, Nigerian courts can recognize and enforce foreign judgments, subject to certain conditions, thereby providing an avenue for parties to enforce their rights in foreign jurisdictions. A local lawyer in Nigeria will assist with registration and enforcement of foreign judgement in Nigeria.

In addition to arbitration and court action, industry regulators can play a crucial role in enforcing commercial contracts. Regulators such as the Central Bank of Nigeria (CBN),  the Federal Competition and Consumer Protection Commission (FCCPC), Nigerian Copyright Commission (NCC), Telecommunication Commission have powers to investigate and sanction parties who breach contractual obligations or engage in anti-competitive practices. These regulators can be particularly useful where a party has breached a contract and is refusing to comply with its obligations. By leveraging the powers of these regulators, parties can compel compliance with contractual terms and ensure that their rights are protected.

It is essential to note that enforcement of commercial contracts does not involve the use of law enforcement agencies such as the Police or the Economic and Financial Crimes Commission (EFCC), whose mandate does not extend to the enforcement of commercial contracts. Parties seeking to enforce their rights must therefore pursue the avenues outlined above, rather than attempting to involve agencies not equipped to deal with contractual disputes. By understanding the available options and leveraging them effectively, parties can ensure that their commercial contracts are enforced and their rights are protected.

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Learn more about the author here  P. D. Pius, Esq., ACIArb. – P. D. Pius & Associates

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